Another $500 Off The Credit Cards

I just paid another $500 off my credit card. I’ve been sitting on this money for a couple of weeks, the only rational I have is that I thought I might need it.

Another strategy I’m considering is transferring the bulk of my pay as soon as I get it to my credit card and then using the credit card for all my purchases. I’ll still need to keep hold of a little cash but I could probably put $700 off my credit cards each fortnight.

The catch with this theory is that I would need to have a great amount of self control not to overspend. When I use cash I can see my wallet getting thinner, when I use the credit card it actually seems to get fatter with all the little docket reciepts I accumulate.

At the moment I have about $120 in my wallet and $378 in my everyday account, that’s got to last me the next 10 days until I get paid again. Now $500 for ten days may seem like an excessive amount of discretionary spending money, but my daily habits of eating and smoking (bad, I know!) run me to about $25 a day. Plus there will enveriably be other expenses, Wining, Dining, etc.

I also spent $130 on clothes yesterday, that went straight on the credit card, and I also spent $235 on a back up drive for my computer, which also went on the credit card, but fortunately because I still have a computer based business (even if it’s technically not making a profit right now) I can write the purchase (and the credit card interest) off against my tax.

I really need to focus on increasing my income so I can lead the lifestyle I want and reduce the credit card debt at the same time.

UPDATE: I found $270 in my business account that I had forgot about, which was immediatly transferred to the credit cards I use for business expenses

Moving Credit Card Debt Around Is A Bad Thing ?

No Credit Needed posted that moving money around with zero interest balance transfers is a bad thing as it’s just moving the debt around it isn’t actually paying it off, which is undeniably true.

Howver what he overlooks is that by transferring the debt onto, a zero interest balance transfer card is that you’re reducing the amount of credit card interest you’re paying and therefore are freeing up cash to reduce the debt.

If I had $1000 invested at 0% return, and I could move it somewhere I would get 10% return do you think I would leave it sitting somewhere less productive ? So the reverse is true for my credit card debt.

In may case I think I’m paying around $2-300 a month in interest, If I wasn’t paying interest on my debt I would have an extra $3000 a year to reduce my debt.

Or another scenario I looked at recently is if I took out a consolidation loan @10.99% and used that to pay off my credit cards over 5 years I would save myself $5,000 in interest over the five years.

My Latest Credit Card Payment Plan

I posted a while ago about my goal of paying $1000 a month off my credit cards, on my current income I’ve realised that this isn’t going to happen.

After things settle down, I’m going to get a personal loan to cover my outstanding credit cards, and maybe fund a new (second hand) car.

I’m still working on some online business things, but they are taking longer than I hoped to produce an income.

I want a life, and I want to clear my credit card debts, hopefully this way I can do both.